SECTION 1. The legislature finds that Hawaii's working families are not adequately supported during times of caregiving and illness. While the federal Family and Medical Leave Act of 1993 allows twelve weeks of unpaid leave to employees who have worked at a business that employs fifty or more employees, the majority of Hawaii's workforce cannot afford to take unpaid leave when needing to provide care to a newborn, bond with a new child, or care for a family member with a serious health condition. The legislature finds that the Hawaii family leave law further restricts eligibility by extending only four weeks of unpaid leave to those employees who work at a business with more than one hundred employees.

The legislature further finds that only eleven per cent of workers in the United States have access to paid family leave through their employers. Approximately 247,000 people in Hawaii serve as family caregivers. Hawaii has the fastest growing sixty-five-plus population in the nation, which is expected to grow by eighty-one per cent by the year 2030. Of those who need leave but cannot take it, nearly one in three need leave to care for an ill spouse or parent. Women, as primary caregivers of infants, children, and elderly parents, are affected disproportionately by the unavailability of paid family and medical leave.

The purpose of this Act is to ensure that employees within the State are provided partial wage replacement during times when they need to provide care.

SECTION 2. Chapter 398, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Wage replacement for family leave

§398-A Partial wage replacement; trust fund established. (a) There is established outside the state treasury, a trust fund to be known as the partial wage replacement for leave trust fund.

(b) The trust fund shall consist of employee contributions which shall not exceed 0.5 per cent of each employee's wages per pay period, as well as interest earned and income, dividends, refunds, rate credits, and other returns received by the trust fund. It is hereby declared that all sums contributed or paid from any source to the trust fund created by this part, and all assets of the trust fund including all interest and earnings of the same, shall be held in trust by the department for the exclusive use and benefit of employees and shall not be subject to appropriation for any other purpose.

(c) Beginning July 1, 2017, the trust fund shall be used to provide an eligible employee with four weeks per calendar year of paid family leave; provided that an employee's weekly benefit shall not be more than sixty-six and two thirds per cent of the employee's weekly wage.

(d) The trust fund shall be under the control of and administered by the department. The department may use up to ten per cent of the annual receipts of the fund for administrative purposes.

§398-B Wage withholding. (a) Beginning January 1, 2017, each employer shall withhold from each employee earned income in an amount equal to the designated percentage in section 398-A and shall make a contribution to the partial wage replacement for leave trust fund per pay period for the withheld amount in the name of the employee.

(b) If an employee's contribution to the trust fund is not withheld and transmitted to the trust fund, the employee shall pay the designated percentage of the employee's wage as specified in section 398-A, per pay period directly to the trust fund by the first day of each month.

(c) Beginning January 1, 2017, each employee shall make a contribution to the trust fund each pay period. The contribution shall be transmitted by the employer to the trust fund via employer wage withholding each pay period.

(d) If there is a dispute between the employee and the employer relating to the withholding of wages as contributions for paid family leave benefits, either party may file a petition with the director for determination of the amount to be withheld. The matter shall be determined by the director and shall be subject to review pursuant to section 398-24; provided that either party may request a hearing under this section.

§398-C Family leave assessment. (a) Beginning January 1, 2017, every employee shall be subject to a family leave assessment at a rate of 0.5 per cent of taxable wages, as specified in section 383-61, unless exempted pursuant to section 383-129(a).

(b) Employee family leave assessments shall be paid through the employer withholding and issued by the unemployment insurance division, acting as agent for the partial wage replacement for leave trust fund. The unemployment insurance division shall be reimbursed by the trust fund for all expenses incurred in issuing notices of family leave assessments, including but not limited to, staff and administrative costs.

(c) Employers shall submit contribution reports and payments for the amounts due and payable pursuant to the withholdings made on behalf of their employees and pursuant to this section as instructed by the department and in compliance with rules adopted pursuant to this chapter.

(d) The department shall be responsible to collect and process all moneys due and payable from employers subject to the assessment in this section. The department shall deposit all moneys collected into the partial wage replacement for leave trust fund.

§398-D Weekly benefit amount. (a) Benefits shall be computed as weekly amounts in the manner provided by section 392-22.

(b) In no case shall the weekly benefit amount exceed the maximum weekly benefit amount specified in section 386-31."

SECTION 3. Section 398-1, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition to be appropriately inserted and to read:

""Trust fund" means the partial wage replacement for leave trust fund."

2. By amending the definition of "employer" to read:

""Employer" means any individual or organization, [~~including the State, any of its political subdivisions, any instrumentality of the State or its political subdivisions,~~] any partnership, association, trust, estate, joint stock company, insurance company, or corporation, whether domestic or foreign, or receiver or trustee in bankruptcy, or the legal representative of a deceased person, who employs one hundred or more employees for each working day during each of twenty or more calendar weeks in the current or preceding calendar year[.] but shall not include the State, or any of its political subdivisions."

SECTION 4. Section 398-3, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) An employee shall be entitled to a total of four weeks of family leave during any calendar year [~~upon the birth of a child of the employee or the adoption of a child, or to care~~]:

(1) To care for the employee's child within twelve months of the child's birth, or foster placement, or placement for adoption with the employee; or

(2) To care for the employee's child, spouse or reciprocal beneficiary, or parent with a serious health condition."

SECTION 5. Section 398-4, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"§398-4 [~~Unpaid leave~~] Leave permitted; relationship to paid leave; sick leave. (a) Pursuant to section 398-3[,] and section 398-A, an employee shall be entitled to four weeks of family leave. [~~The family leave shall consist of unpaid leave, paid leave, or a combination of paid and unpaid leave.~~] If an employer provides paid family leave other than that required by this chapter for fewer than four weeks, [~~the additional~~] that period of leave [~~added~~] shall be subtracted from the four weeks required by section 398-3 to attain the four-week total [~~may be unpaid.~~], not including accrued sick or vacation hours." SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2015-2016 and the same sum or so much thereof as may be necessary for fiscal year 2016-2017 for the purpose of hiring an administrator, an administrative assistant, and an accountant to administer the partial wage replacement for leave trust fund, including oversight of payroll deductions, administrative processes, and payment to eligible employees, and an amount sufficient to reimburse the unemployment insurance division for the staff and processing costs to administer the collection of payments for this program.

The sums appropriated shall be expended by the department of labor and industrial relations for the purposes of this Act.

SECTION 7. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 8. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2015.

HOUSE OF REPRESENTATIVES	H.B. NO.	496
TWENTY-EIGHTH LEGISLATURE, 2015		H.D. 1
STATE OF HAWAII